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Lumber, plywood prices skyrocket
New York Times via Houston Chronicle ^ | May 1, 2004 | BERNARD SIMON

Posted on 05/05/2004 4:30:23 PM PDT by snopercod

TORONTO — Lumber and plywood prices have shot up so rapidly in recent months that they are tearing the profit out of home construction for some builders and threatening to dent the booming housing market.

Paul Kuszmaul, president of Kuszmaul Builders in Champion, Ohio, said the run-up in prices had left him unsure whether to push ahead with a condominium development in the Mahoning Valley, between Pittsburgh and Cleveland.

Since January, he said, the cost to build each condo unit in the project had risen $4,000, largely because the price has more than doubled for oriented-strand board, a widely used substitute for plywood made by pressing long wood strips together using adhesives.

The product has been rapidly displacing plywood as a construction material because it is cheaper to make, can be made from the limbs and roots of trees as well as trunks, and is more uniform in quality. Almost three-fifths of all structural wood panels now sold are oriented-strand board, or OSB, compared with a quarter in the early 1990s.

Prices of both OSB and plywood reached records one week last month. According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Plywood prices began to rise last year in late May and early June, dropping late in the year, before increasing sharply in January.

Prices of other types of lumber have also risen, although less sharply. And the buoyant metals markets, especially for steel, have also driven up costs.

"It's almost a rocket ship ride," said Jim Enright, general sales manager at Rosboro Lumber, a plywood manufacturer in Springfield, Ore. "The activity level since the beginning of the year has been phenomenal."

The ride has been less exhilarating for buyers. Brian Catalde, president of Paragon Communities, a builder in Playa del Rey, Calif., said that the cost of the lumber used in building a typical entry-level home had roughly doubled in 18 months, to $24,000.

A handful of manufacturers dominate the OSB market. Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada.

One reason for the price surge is that production of the boards has not grown fast enough to make up for the loss of plywood, because of the closing of older plants.


TOPICS: Business/Economy; Extended News
KEYWORDS: construction; inflation; lumber; tariffs; treehuggers
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I bought some things for a project at the lumber store today and am still in shock. Since this article was written, plywood prices have jumped 20% in less than a week.
1 posted on 05/05/2004 4:30:23 PM PDT by snopercod
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To: snopercod
Another happy byproduct of the environmental / ecoterror movements.
2 posted on 05/05/2004 4:32:26 PM PDT by Joe 6-pack ("We deal in hard calibers and hot lead." - Roland Deschaines)
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To: The G Man; Brian S; wjcsux; Eric in the Ozarks
bump
3 posted on 05/05/2004 4:32:47 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Gosh...between lumber, gas and milk prices....we are in for a fun summer!
4 posted on 05/05/2004 4:32:52 PM PDT by BossLady (What do your choices cost you????)
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To: Joe 6-pack
Another happy byproduct of the environmental / ecoterror movements.

This cannot be said often enough.

5 posted on 05/05/2004 4:34:08 PM PDT by thackney (Life is Fragile, Handle with Prayer)
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To: Joe 6-pack
The guy at the lumber store said, "All the plywood is being sent to China and Iraq".

Yeah...I know...

6 posted on 05/05/2004 4:34:20 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: BossLady
Don't forget steel and copper.

Thank G-d beer is still reasonable.

7 posted on 05/05/2004 4:35:30 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Iraq reconstruction builds plywood demand, prices

By Gary Strauss, USA TODAY

Posted 9/1/2003 10:51 PM

A government order for plywood panels destined for Iraq is pushing key wood products prices to all-time highs. The Defense Logistics Agency, the military's prime supplier, is buying more than 20 million feet of plywood sheeting, most for U.S. forces' base camps, guard posts and other projects, spokeswoman Dawn Dearden says.

The $13.3 million purchase is relatively tiny — about 300 million feet of plywood sheeting is sold monthly. But in an industry facing surging demand, the deal — and rumors that more lumber is headed for Iraqi reconstruction efforts — is fueling an already overheated market, says Shawn Church of Random Lengths, an industry newsletter that charts prices.

The price of 7/16-inch oriented strand board (OSB), a plywood composite common in new homes, low-rise apartments and commercial structures, hit $415 per 1,000 square feet Friday, eclipsing a $355 high in 1999. Pricing on 15/32-inch plywood sheets jumped to $470, also eclipsing 1999 highs.
8 posted on 05/05/2004 4:39:30 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Dang.....steel and copper are on the list as well?!

Mountain Dew is still reasonable too.....whew!

9 posted on 05/05/2004 4:39:33 PM PDT by BossLady (What do your choices cost you????)
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To: snopercod
I quit beer over a decade ago when the price of anything but canned horsep*$$ got too high. I don't see how we will be able to afford anything, wood, steel, or beer much longer.
10 posted on 05/05/2004 4:40:58 PM PDT by RightWhale (Destroy the dark; restore the light)
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To: BossLady
Pssst.... What ever you do, don't say the "I" word. Chairman Greenspan says there is no evidence for "it."
11 posted on 05/05/2004 4:41:06 PM PDT by Misterioso (This is a duplicate post from the other thread.)
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To: BossLady
Reinforcing rods and welded wire mesh used in concrete slabs are up 300% since last year.
12 posted on 05/05/2004 4:41:32 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: snopercod
Have you bought any steel lately. Yikes! Waaaaaaaaay UP!
13 posted on 05/05/2004 4:42:08 PM PDT by BJungNan
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To: snopercod
We have the misfortune of beginning to build our new home now...

We expect to break ground next week.

The estimate for plywood and dimensional lumber was over $95k for the project and that was a week or so ago...

We've been working and saving for 11 years to build on our property and now the prices are souring out of control. I don't know what's going to happen. I expect many sleepless nights...
14 posted on 05/05/2004 4:42:44 PM PDT by DB (©)
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To: snopercod
That is outrageous! I had no idea! What gives? Are you in the construction biz?
15 posted on 05/05/2004 4:43:06 PM PDT by BossLady (What do your choices cost you????)
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To: snopercod
I just called my supplier...here are his latest quotes on CDX and OSB

1/2 8' OSB 1689.60 per unit / 51.80 sheet / 1.60 sq ft
1/2 8' CDX 1584.00 per unit / 48.00 sheet / 1.50 sq ft

All I can say is thats absurd.

Quotes are from Golden State Lumber, San Rafael, and subject to change.
16 posted on 05/05/2004 4:43:09 PM PDT by antaresequity
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To: Misterioso
Tagline removal bump. (g)
17 posted on 05/05/2004 4:43:41 PM PDT by Misterioso
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To: snopercod
Reinforcing rods and welded wire mesh used in concrete slabs are up 300% since last year.

Bush steel tariffs largely to blame here. American prouction capability is not up to speed....and even if it was, it is more expensive.

18 posted on 05/05/2004 4:44:36 PM PDT by antaresequity
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To: snopercod
I just filled the gas tank for $2.20 a gallon. Think I might swing by the gravel yard and get a couple sacks of cement. It wasn't bad last year. Maybe I'll use straw for reinforcement if I can figure out how to keep it from floating to the top. If cement is too high, I'll try sun-dried mud bricks. Of course, we don't get much sun.
19 posted on 05/05/2004 4:45:28 PM PDT by RightWhale (Destroy the dark; restore the light)
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To: antaresequity
$48 a sheet for 1/2" CDX?!?!?! Holy Shiite!
20 posted on 05/05/2004 4:45:29 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: antaresequity
Our local home depot had 1/2" CDX for $32.90 per sheet yesterday. But that still puts me in shock!
21 posted on 05/05/2004 4:46:26 PM PDT by JoeSixPack1 (Our American prison guard's in Bahgdad need extended time off in Leavenworth, Ks.)
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To: DB
Good luck, the stock of plywood and OS board in NJ is non-existent, large builders are bringing it in from other states, and NJ based builders are going to lengths, like travelling 2 to 3 states away to buy supplies. NJ is still in a new construction boom, prices are skyrocketing on new homes built with sub-standard lumber (and sub-par construction workers), these homes won't stand for more than 20 years.
22 posted on 05/05/2004 4:47:26 PM PDT by JerseyHighlander
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To: snopercod
I am glad I will be building with concrete. By the time wood finishes going up in price, concrete will be cheaper.
23 posted on 05/05/2004 4:47:27 PM PDT by Veloxherc (To go up pull back, to go down pull back all the way.)
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To: snopercod
"'The guy at the lumber store said, "All the plywood is being sent to China and Iraq""'

I dont think the world is even remotely prepared for the impact China is going to have on the global economy. It will be the greatest upheaval in 60 years
24 posted on 05/05/2004 4:47:27 PM PDT by boxsmith13
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To: snopercod
According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Yes, but a year ago, the plywood business was in a slump---prices were way down and wood processing plants were shut down---putting a lot of people out of work.

What was the price of plywood in 2000 or 2001?

I know this is hard for the media to understand, but in a market economy, prices go up and down based on demand. I'm sure John Kerry feels that if he is elected, he will be able to order prices very low with no impact on production---after all, his favorite era was the Nixon administration.

25 posted on 05/05/2004 4:47:28 PM PDT by John Thornton
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To: snopercod
Use CMU instead.
26 posted on 05/05/2004 4:49:12 PM PDT by Rome2000 (Foreign leaders for Kerry!!!!!)
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To: snopercod
Ther are litterally MILLIONS of good prime lumber pine trees standing dead right now in the forests of Southern California.Victims of drought, inviting bark beetle infestations due to overgrowth, too many trees per acre competing for moisture. But offers for their sale and removal will not be touched by lumber companies due to all the environmental restrictions placed within the contracts. The BLM even offered a lumber mill free for the taking but no takers.
Right now in the San Bernardino National Forest , property owners are paying a premium price to have contractors remove the dead trees, racing to get ahead of the next fire season ,and they go to waste,or firewood mostly
It is a tragedy, By next year Sequoia National forest will have millions of Brown dead standing pine , the death rate is already showing around 20% there 80% dead forest in San bernardino NF
Good thing Clinton declared all that new National Monument status locking out the public access to all that beautiful forest and killing any chance of harvesting or thinning.
A great national treasure squandered by the Leftist entity, The Sierra Club
27 posted on 05/05/2004 4:50:20 PM PDT by Freesofar (vicariously micromanaging reality from the safety of my keyboard,)
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To: DB
We've been working and saving for 11 years to build on our property and now the prices are souring out of control. I don't know what's going to happen. I expect many sleepless nights...

Having built two houses on my own - one in Los Osos, one in NC - I know what is going to happen.

You are going to run out of money before it is finished unless you take action now. You probably will anyway. I always did ;-)

There are many things you can do to cut costs. Better start looking...

28 posted on 05/05/2004 4:50:50 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: JerseyHighlander
I'm in central California. Probably just as bad here...
29 posted on 05/05/2004 4:51:00 PM PDT by DB (©)
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To: antaresequity
OK, I stand corrected, NJ prices haven't hit that level yet, but try getting one order for a house, won't happen, home improvement contractors are running around buying here and there for additions, houses have board stamped from 2 or 3 manufacturers.
30 posted on 05/05/2004 4:51:06 PM PDT by JerseyHighlander
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To: BossLady
All this inflation could be enough to trigger a new recession...that's what I fear.

It probably won't happen before November, however, so if Bush can keep a 1-vote lead in Florida and Ohio...
31 posted on 05/05/2004 4:51:08 PM PDT by dufekin (Eliminate genocidal terrorist military dictator Kim Jong Il ASAP)
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To: antaresequity; snopercod
1/2 8' OSB 1689.60 per unit / 51.80 sheet / 1.60 sq ft

1/2 8' CDX 1584.00 per unit / 48.00 sheet / 1.50 sq ft

I ain't paying that for birch and oak plywood.

3/4" shop grade birch is running around $30.00 per sheet.

3/4" oak is running $44.00 per sheet.

32 posted on 05/05/2004 4:51:17 PM PDT by Vigilantcitizen (Donít go around stating the world owes you a living; the world owes you nothing; it was here first.)
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To: JoeSixPack1
whoops

I made a mistake [actually the guy quoted it wrong]

I called back...Golden State is quoting 20.94 and 21.20 a sheet [CDX/OSB]
33 posted on 05/05/2004 4:51:28 PM PDT by antaresequity
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To: snopercod
We're working on rebuilding the fence around our yard (6'x 8" rough cut redwood). My husband has decided to redesign the portion in the backyard that borders on open space, after checking out the price of lumber. We're using wire, reusing the posts, since they're still most in pretty good shape (the infill, however, and the rails were pretty shot), and replacing the top and bottom rails and the kickboards. He just bought the rails over the weekend, and paid over $200 for rough cut redwood, 2X4's, I think. I'm glad he agreed to do the wire thing. I had proposed this before, and he didn't like the idea. But, it'll save us a whole lotta money to do it this way. It doesn't look bad, and several of our neighbors have done it this way.
34 posted on 05/05/2004 4:51:31 PM PDT by .38sw
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To: snopercod
He thinks those prices are high, he should price redwood. A 16' 2x6 is $20. And that is common construction not heart. Heart is $10 more.
35 posted on 05/05/2004 4:53:14 PM PDT by farmfriend ( In Essentials, Unity...In Non-Essentials, Liberty...In All Things, Charity.)
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To: snopercod
I guess I now have a good excuse for not starting that huge deck my wife has been nagging me about.

"Not now, dear, we have to wait for the lumber prices to fall back down."
36 posted on 05/05/2004 4:53:14 PM PDT by Skooz (My Biography: Psalm 40:1-3)
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To: Vigilantcitizen
my mistake...I divided by 33 sheets a unit not 66...and the first quote was not my regular guy...it was the counter guy.

I got throug to my broker and he quoted both at around 21 a sheet.

Sorry for the confusion
37 posted on 05/05/2004 4:53:27 PM PDT by antaresequity
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To: snopercod
That was encouraging...

I think I'll just go and cry now...
38 posted on 05/05/2004 4:53:57 PM PDT by DB (©)
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To: antaresequity
Sweet Mother of God! $48 for 1/2 CDX?
39 posted on 05/05/2004 4:54:54 PM PDT by Petronski (Hubris knows no editor.)
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To: BossLady
Are you in the construction biz?

Kindasorta. I was licensed in CA way back when, but couldn't tolerate the excessive regulation and left the miserable state. I have built two homes on my own (with the help of my lovely wife).

Now I design houses out of my house since I can't find a "real job" here in NC.

I was thinking of building a small vacation rental here in the mountains where I live. I have an offer in on a lot a few hundred feet from a big waterfall. Now I am wondering if this is going to work...

40 posted on 05/05/2004 4:55:49 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: Petronski
No the quote was wrong and I divided by 33 sheets per unit not 66

In Marin, today, right now, its 21 bucks a sheet if you buy a whole unit. 66 sheets.
41 posted on 05/05/2004 4:56:11 PM PDT by antaresequity
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To: antaresequity
Golden State is quoting 20.94 and 21.20 a sheet [CDX/OSB]

That guy's "mistake" might have been an attempt to see if you'd pay it. $21 is much more, uh, reasonable(?).

42 posted on 05/05/2004 4:56:58 PM PDT by Petronski (Hubris knows no editor.)
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To: snopercod
Build with concrete.
You can incorporate wood grain effects if you must.
I could use the work.
43 posted on 05/05/2004 4:57:44 PM PDT by Freesofar (vicariously micromanaging reality from the safety of my keyboard,)
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To: Petronski
Last house I built we were paying 14-17 bucks a sheet for 8,9,10 foot sheets by the unit.
44 posted on 05/05/2004 4:58:05 PM PDT by antaresequity
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To: antaresequity
Whew.
45 posted on 05/05/2004 4:58:05 PM PDT by Petronski (Hubris knows no editor.)
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To: antaresequity
Sorry for the confusion

No apology necessary. I have problems with math sometimes myself. :)

46 posted on 05/05/2004 4:58:34 PM PDT by Vigilantcitizen (Donít go around stating the world owes you a living; the world owes you nothing; it was here first.)
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To: Joe 6-pack
Another happy byproduct of the environmental / ecoterror movements.

They'd rather dead trees over-crowd forests, create hugh wildfires...
and they complain about the need for more funding on reducing "particulate pollution".

The EPA and the enviro-wacko job sectors: great work if you can get it.
And learn how to do without sleeping at night or ever looking into a mirror.
47 posted on 05/05/2004 4:58:45 PM PDT by VOA
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To: snopercod
"...Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada..."
- - -
I happen to work for one of the companies named.
Lumber prices are experiencing a perfect storm, of sorts.

-Demand is up due to the low interest rates for mortgages.
-Demand is up due to some very large government contracts.
-Supply is down due to the shut-down of a lot of production units when prices were so low a few years back.
-Supply is down due to some of the more recent HUGE (hugh)environmental costs that the "little guys" could not afford and/or justify.
-Operating costs for the plants are up due to higher energy costs.
-Wood supply (trees) is a little low.
-Transportation costs are up due to fuel prices.

Meanwhile, my company stock is doing quite well.
48 posted on 05/05/2004 4:58:49 PM PDT by DefCon
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To: farmfriend
I put diagonal 1x12 T&G clear heart redwood siding on the first house I built in the mid 70's. $680 per thousand. Those were the days.
49 posted on 05/05/2004 5:00:17 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: DB
Don't worry about it.

We built our home in 2002, and I ran out of money before it was completed. We moved in Labor Day 2002 and lived on subfloors for awhile.

We've just been doing it as we can get to it. We are about a year behind schedule right now, but it is going well.

I think I appreciate it more this way.
50 posted on 05/05/2004 5:00:42 PM PDT by Skooz (My Biography: Psalm 40:1-3)
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